Maha govt may amend MPID Act to check fraudulent investment

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PTI

February 28, 2018

UPDATED: February 28, 2018 16:05 IST

schemes

Mumbai, Feb 28 (PTI) The Maharashtra government may consider making amendments in law to protect depositors and keep a check on companies duping investors with fraudulent schemes, Chief Minister Devendra Fadnavis said today.

The chief minister was responding to a Calling Attention motion moved in the state Legislative Council by Congress member Satej Patil over Pancard Clubs, a private company running collective investment schemes, termed illegal by the market watchdog Sebi.

The Pancard Clubs has allegedly trapped over 51 lakh investors, he said, adding that the Securities and Exchange Board of India (Sebi) and the Economic Offences Wing (EOW) have collectively attached its properties worth over Rs 4,500 crore.

The SEBI and the EOW are in the process of liquidating the companys assets to pay back the duped investors, he said.

The money trail of the accused is being investigated to make the case stronger against them, Fadnavis said.

Jayant Patil (of the Peasants and Workers Party) then sought to know if the government would bring about a law to keep a check on firms that crop up to gobble up the investors funds through fraudulent schemes and later disappear.

Responding to him, Fadnavis said, "We will see if amendments can be made to the existing Maharashtra Protection of Interest of Depositors In Financial Establishments (MPID) Act to bring such companies under its ambit."

He said that strict action will also be taken against those companies which place advertisements in newspapers to lure people to invest in their fraudulent schemes.

The Pancard Clubs had failed to comply with Sebis direction in February 2016 ordering it to refund to investors over Rs 7,000 crore, raised through illegal collective investment schemes.

The company had mobilised Rs 7,035 crore from 51,55,516 investors from 2002-03 to 2013-14 through its various holiday schemes. PTI MM GK BAS

This is unedited, unformatted feed from the Press Trust of India wire.

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